Joe Fairless on Investing in Property Without Money
The Best Real Estate Investing Advice Ever is the name of Joe Fairless podcast, and it’s one that covers any number of topics in this exciting sector. He’s known for encouraging people to go after their dreams — even when they’re short on cash. Here, he opens up about a few ways to get started without the capital.
Hard money, private money, peer-to-peer money, the reality is that you may still have access to capital if you can’t go through the banks. (If you’re making an investment deal, commercial banks will typically ask to see hefty down payments.) As you might imagine, the interest rates can be exceptionally high, though, meaning you’ll need to work out your profit margins long before you ever approach these lenders. You’ll also want to learn all about the lender’s criteria too, as their demands can really run the gamut. Joe Fairless says that due diligence is important in any industry, but in real estate, it’s a non-negotiable.
Wholesaling is kind of like being a real estate agent, though the specifics are different. Typically, wholesalers will work with distressed properties that are likely to sell for heavy discounts. They find buyers for these properties on behalf of the sellers and then take a cut for their services. The difference between a wholesaler and an agent is that the wholesaler will turn over the contract to the seller once it’s already in progress. (They do not have the right to finish the sale from beginning to end as an agent would.) Fairless says that this can be a great way to get your feet wet in property sales and grow your nest egg for investment at the same time.
Real estate investment trusts have dropped off some in terms of their ubiquity, but this doesn’t mean they can’t be a good investment strategy. With this option, you can get started for very little capital and still have a stake in different kinds of properties. A few years ago, REITs were largely advertised as no-muss, no-fuss investments that require almost no money to get started in. However, Joe Fairless encourages investors not to take a hands-off approach with any of their assets.
Before you get involved with a partner, you need to know what their priorities are and how they’ve managed operations in the past. Once you invest in the REIT, you have to stay involved to ensure the quality standards remain high. In other words, REITs may seem like excellent options if you don’t have the time to manage a property, but you’ll still need plenty of time to understand how they work and what you’re pulling out of them.
Joe Fairless On Investing
Investing can be terrifying, no matter how much you start with. There’s always the chance that anything from a global recession to a personal life crisis could get in the way. Fairless believes that fear should never limit your prospects though. As long as you head into a transaction with both eyes open, your odds of success may be better than you think.